As you are getting ready to rent out your property, one of the biggest decisions you make is how rent is paid. If you are planning on traveling for long periods of time or live far from your properties, you’ll want to explore some options on how your tenants should pay the rent.
Let’s start with how you should not collect rent (unless you’re in an ADU or DADU situation) and that’s in-person. This is especially true if rent is paid in cash. If you are renting a room in your home or a basement unit or cottage in the yard, then you most likely will be collecting the rent in person. What you want to avoid, for those that own multi-family or even a single-family house is having criminals figuring out when you’re going to collect the rent and attempting a robbery. Collecting in person might lead to having to chase tenants around for the rent and that is not a good habit to get into.
So now that we have eliminated in-person and in-cash as ways to collect rent, let’s talk about some great ways to collect rent!
In the Mail
The mail is a popular way of collecting rent for a variety of reasons.
The trend within the rental housing industry is toward paying electronically. This is helpful because you can usually stop payment from someone, rent is conveniently deposited in your account (great for those who live far from their property or travel often). Many of the popular software companies like Buildium offer this service but for smaller owners like most of our members, popular options include Paypal and Venmo. These are easy payment methods that can be accessed via computer, tablet or smartphone and are convenient ways to accept rent. While ACH, direct to bank account is a popular option, RHAWA does not recommend this, as it is not easily stopped in case of a 3-day pay rent or vacate eviction process.
Cash to Electronic
Silicon Valley is always looking for new ways to get money from one person to another and one of the recent innovations is a new service PayNearMe. Once you set that up (it’s fairly easy) you can give your unique code to your tenants and they can deposit cash at a 7-11, ACE Check Cashing Center, CVS drug stores or many other locations. PayNearMe sends the money directly to your bank account. If you have tenants who tend to use cash more than electronic means, this can be a great option. It’s also easy to set up and inexpensive to use.
However you decide to accept rent, it’s important that you have a system, that you go over it with your tenants and be consistent so that you can collect rent consistently and easily each month without having to chase tenants or cause unnecessary late fees.